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Wednesday, 27 September 2023

Skoda India-Vietnam Launch: Škoda Auto Celebrates Key Internationalisation Milestone

By 121 News
Mladá Boleslav/Hanoi, Sept. 27, 2023:– Škoda Auto has taken an important step in its internationalisation strategy today with its entry into the Vietnamese market. A celebratory event took place with representatives of the Vietnamese and Czech governments alongside Škoda's local distribution and production partner, TC Group. Škoda Auto projects a rapid expansion of the dealer network to as many as 30 partners and an annual sales potential of over 40,000 units beyond 2030. The first models, starting with the Karoq and Kodiaq, will be imported from Europe. Local CKD production, planned to start next year, aims to leverage synergies due to the country's proximity to India. Škoda views Vietnam as a gateway to the promising ASEAN region.
Klaus Zellmer, Škoda Auto CEO, said that we are excited to engage with Vietnam's dynamic economy and a new group of customers in this fast-growing market. This is also the next step in our accelerating internationalisation strategy, strengthening our brand in the ASEAN region and intensifying the synergies between our two key markets of India and Europe. During the preparations, it has been clear that in TC Group we have an excellent partner for the production and sale of our attractive model portfolio. He looks forward to starting a successful future together.
Martin Jahn, Škoda Auto Board Member for Sales and Marketing, said that today marks an important milestone in the history of Skoda Auto. By entering the Vietnamese market, we are further strengthening our position in the global automotive industry. We have a clear strategy, ambitious targets, and a strong local partner in TC Motor. Our medium-term plan is to engage around 30 local contractual partners, assemble around 30,000 cars from CKD kits, and realise a sales potential of more over 40,000 vehicles annually beyond 2030. This move solidifies Škoda's commitment to serving our Vietnamese customers and becoming an important presence in the local market.
 Škoda Auto celebrates market launch with celebratory event, plans to expand dealer network.
The Czech car manufacturer presented the Kvasiny- produced SUV model series Karoq and Kodiaq, which will be the first models available on the local market. Customers can purchase these at the first Škoda showroom in Hanoi from 25 September onwards. Additional showrooms in central and south Vietnam are in the pipeline. The goal is to expand the dealer network to 20 Škoda dealerships by 2025 and 30 by 2028.
First models imported from Europe in 2023, start of local CKD production in 2024
Škoda has a well-defined roadmap for the Vietnamese market, with plans to expand its model portfolio in response to customer preferences. The Octavia and Superb models are slated for importation to Vietnam in the medium term. Additionally, the all-electric Enyaq family is being introduced to cater to the growing demand for electric vehicles among Vietnamese consumers.
Starting in the second half of 2024, Škoda will be tapping into significant regional synergies. By then, the first Kushaq vehicles will have been exported from the Pune facility in India to Vietnam for assembly from CKD (Completely Knocked Down) kits, with the Slavia set to follow in 2025. Construction of a production line at the Viet Hung Industrial Park in Quang Ninh province by Škoda's local partner TC Group is already underway. Based on market trends, there are ambitions to ramp up production, potentially assembling as many as 27,000 vehicles annually after 2027.
High growth potential and projected annual deliveries of over 40,000 units beyond 2030
The automotive market in Vietnam is exceptionally dynamic. At present, Vietnam is the fourth strongest automotive market in Southeast Asia. Moreover, with only 38 vehicles per 1,000 inhabitants in a population of roughly 100 million people and given the anticipated national economic growth, Vietnam is emerging as the country with the highest growth potential in the region. The brand foresees annual sales of 30,000 units in the medium term, with that figure rising to more than 40,000 units after 2030. The capacity at the Viet Hung Industrial Park, where the TC Group-owned plant is located, could be used in the future to expand production with a view to potentially exporting Škoda models across the entire ASEAN region.

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